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Partisan Politics and Excise Tax Rates in the United States

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  • William B. Hankins

Abstract

The literature on excise tax rates has provided mixed evidence concerning how partisan ideology affects tax changes. Using a regression discontinuity design and a panel of U.S. states over the period 1970–2019 I find no significant difference in cigarette, distilled spirits, or gasoline excise tax rates between Democratic governors and Republican governors elected by a similar margin. This result is found regardless of whether the governor can run for an additional term or faces a binding term limit. These results are robust to an analysis of the post-southern realignment period, when controlling for southern Democrats, or when analyzing open elections without an incumbent in the running. An implication of this result is that interstate tax competition and the mobility of the tax base dwarfs any ideological differences with respect to excise tax policy.

Suggested Citation

  • William B. Hankins, 2023. "Partisan Politics and Excise Tax Rates in the United States," Public Finance Review, , vol. 51(6), pages 719-747, November.
    • Handle: RePEc:sae:pubfin:v:51:y:2023:i:6:p:719-747
    DOI: 10.1177/10911421231183395
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    References listed on IDEAS

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    1. Alejandro Esteller-Moré & Leonzio Rizzo, 2014. "US excise tax horizontal interdependence: yardstick versus tax competition," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(3), pages 711-737, May.
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    More about this item

    Keywords

    Political parties; excise taxes; regression discontinuity; term limit;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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